Determine the economic service life of the equipment

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Reference no: EM131005864

To improve package tracking at a UPS transfer fa- cility, conveyor equipment was upgraded with RFID sensors at a cost of $345,000. The operating cost is expected to be $148,000 per year for the first 3 years and $210,000 for the next 3 years. The salvage value of the equipment is expected to be $140,000 for the first 3 years, but due to obso- lescence, it won't have a significant value after that. At an interest rate of 10% per year, determine the economic service life of the equipment and the associated annual worth.

Reference no: EM131005864

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